Rejecting opposition from the cable and real estate industries, California Gov. Gavin Newsom signed a bill that aims to increase broadband competition in apartment buildings.
The new law taking effect on January 1 says landlords must let tenants "opt out of paying for any subscription from a third-party Internet service provider, such as through a bulk-billing arrangement, to provide service for wired Internet, cellular, or satellite service that is offered in connection with the tenancy." It was approved by the state Assembly in a 75–0 vote in April, and by the Senate in a 30–7 vote last month.
"This is kind of like a first step in trying to give this industry an opportunity to just treat people fairly," Assemblymember Rhodesia Ransom, a Democratic lawmaker who authored the bill, told Ars last month. "It's not super restrictive. We are not banning bulk billing. We're not even limiting how much money the people can make. What we're saying here with this bill is that if a tenant wants to opt out of the arrangement, they should be allowed to opt out."
Ransom said lobby groups for Internet providers and real estate companies were "working really hard" to defeat the bill. The California Broadband & Video Association, which represents cable companies, called it "an anti-affordability bill masked as consumer protection."
Complaining that property owners would have "to provide a refund to tenants who decline the Internet service provided through the building's contract with a specific Internet service provider," the cable group said the law "undermines the basis of the cost savings and will lead to bulk billing being phased out."
State law fills gap in federal rules
Ransom argued that the bill would boost competition and said that "some of our support came from some of the smaller Internet service providers."
California's law fills a gap in federal rules. A Federal Communications Commission proposal to let tenants opt out of bulk billing was floated in March 2024 by then-FCC Chairwoman Jessica Rosenworcel, but not adopted.
When Rosenworcel proposed a federal opt-out rule last year, the FCC said it would "increase competition for communications service in these buildings by making it more profitable for competitive providers to deploy service in buildings where it is currently too expensive to serve consumers because tenants are required to take a certain provider's service." But the proposal was nixed in January 2025 by Chairman Brendan Carr, shortly after President Trump elevated Carr to the FCC's top slot.
If a California landlord offers bulk billing and fails to comply with the new law's opt-out requirement, the landlord's tenants will have the right to "deduct the cost of the subscription to the third-party Internet service provider from the rent." The law prohibits landlords from retaliating against tenants.
Bulk billing contracts are generally allowed by the FCC, except when they give a provider the exclusive right to access and serve a building. Landlords can still prevent other ISPs from installing wires in a building, though.
"While a service provider may not enter into an agreement that grants exclusive access to an MTE [multiple tenant environment] property, a landlord may still choose the providers it allows into the building, even if that means only one company provides service," the FCC says. While residents may still only have one choice for wired broadband, the California law could help fixed wireless Internet providers gain subscribers.
The California Broadband & Video Association told the Sacramento Bee that it is disappointed Newsom signed the bill "because we think it will be an impediment to utilizing an effective tool, bulk billing, that has helped middle class Californians be eligible for discounted rates to high-speed Internet. We will endeavor to do our best and continue to provide quality services at affordable rates."
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